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Data as the New Currency: Weekend Reading

Governments are one of the biggest producers of data—and one of the few that deliver data to the public free of charge. They already regulate how organizations may use personal data and myriad other issues related to data.

Illustration by John Hersey

The question, then, isn’t really whether governments should get involved in the new data marketplace, but rather how they should take part.

In the article, Data as the New Currency: Government’s Role in Facilitating the Exchange, authors William D. Eggers, who leads Global Public Sector Research for Deloitte Services LP; Rob Hamill, Deloitte Consulting LLP; and Abed Ali, also of Deloitte Consulting LLP, discuss the opportunities presented by the new marketplace and the three principal roles governments will play in the emerging data economy: producer, consumer and facilitator. Following is an excerpt from the article, which examines how governments can:

Use public data to help foster new commercial opportunities

Use commercial data to perform its own work more efficiently and effectively

Combine public and commercial data to serve the public in ways still to be conceived

“Beyond the public sector, commercial opportunities abound in the new data marketplace and multiple examples of how the private sector can leverage available data,” says Mr. Eggers.

For example, a public-private partnership with respect to data usage could include the following strategies:

Cost reduction through outsourced data collection. Opportunities now exist for government to outsource some data collection and concentrate on data analysis, saving time and money, and eliminating duplication and redundant data collection.

Development of new public services. Data can have transformative power in helping governments better serve citizen-customers.

Setting parameters for data use. Government initiatives will become more important to help bring order to the data economy. Regulators can create parameters that foster innovation without compromising privacy.

Commercial use of public data. Opportunities for businesses to leverage public data are plentiful. Data can be used to gain insights on customers, develop new products/services, and identify demographic and geographic trends.

Search “data as a currency,” and you’ll get back millions of results. “What if Web Users Could Sell Their Own Data?” asks a blogger for the New York Times.¹ A story in Information Management highlights “Big Data Analytics: The Currency of the 21st Century Enterprise.”² You’ll find stories heralding big data as the new currency for science, stories on the personal data marketplace, and even stories on stolen data as a currency—not to mention prominent TED talks, World Economic Forum studies, and multiple books on the subject. The gist of the argument: Personal data has an economic value that can be bought, sold and traded.

Remarkably, one area has gone largely unexplored: the role that governments will—or should—play in establishing data as a currency. Given the problems governments face in maintaining stable monetary systems, many data enthusiasts would just as soon have government stay away from this emerging instrument of exchange.

Like it or not, that’s not going to happen. For one thing, governments are one of the biggest producers of data—and one of the few major producers that deliver data to the public free of charge. At last count, more than one million data sets from governments around the world were available on the web.³

Second, governments already regulate how organizations may use personal data, what privacy rights individuals have and myriad other issues involved with the new data marketplace. If anything, regulation is likely to increase in coming years as privacy advocates and consumers step up their demands.

Last, revelations of the use of private data by the U.S. intelligence community have brought the issue of co-mingling of public and private data to the forefront of public debate. While the politics are beyond the scope of this article, public consensus on the balance between privacy, security and the flow of personal data will be critical to realize the promise the new data economy represents. Will governments encourage and stimulate a vibrant exchange in this new currency, or will they get in the way?

Read the full article, which explores the evolution of personal data into a currency with economic value and the unique, and large role, governments can play in this marketplace.⁴

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